This project will estimate the price elasticity of the demand for HMO enrollment, that is, theextent to which employees are sensitive to the out-of-pocket premium in deciding whether to join an HMO. It will also estimate their sensitivity to the premium of conventional insurance and to aspects of comprehensiveness such as the coinsurance rate. Most families obtain their health insurance through their employer. A national sample of firms collected by the Bureau of Labor Statistics will be analyzed. The percentage of employees joining an HMO will be regressed on variables such as the HMO premium, the conventional insurance premium (both as paid by the employee), and characteristics of insurance plans. A partial adjustment model will be used. Secondarily, the project will estimate the price elasticities of demand for comprehensive verus catastrophic insurance. The project is part of a larger investigation of the desirability of HMOs and the economic feasibility of encouraging them.